AXA, Aviva, CNP Assurances and Fonds de Réserve pour les Retraites (FRR) announced today they are joining the UN-convened Net-Zero Asset Owner Alliance, raising total assets under management targeting carbon neutrality by 2050 to more than $3.9 trillion.
The Alliance is a group of the world’s largest pension funds and insurers committing to fully decarbonise their portfolios to avoid a global temperature increase above 1.5°C. Launched in September at the Climate Action Summit, it was initiated by Allianz, Caisse des Dépôts (CDC), La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re, who were joined by Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand and Zurich as founding members.
Eric Usher, UNEP FI Head said: “The addition of four significant asset owners signals growing commitment by investors to align their portfolios with the ambitious 1.5°C target that goes beyond even the level of ambition reflected in the Paris Agreement. Concerted investor action led by the Alliance signals to financial markets that making entire portfolios net zero carbon is now clearly on the agenda.”
Now 16-strong, the Alliance actively encourages additional investors to join by committing to a net-zero portfolio by 2050 in support of a global economy that delivers emissions reductions in line with scientifically determined targets.
This is critical in light of recent evidence from UN Environment Programme’s Emissions Gap Report, published yesterday, which found collective ambition must increase more than fivefold over current levels to deliver the cuts needed over the next decade to achieve the 1.5°C goal. The Intergovernmental Panel on Climate Change (IPCC) has warned that going beyond 1.5°C will increase the frequency and intensity of climate impacts, such as the heatwaves and storms witnessed across the globe in the last few years. In the report, UNEP said the world must deliver deep cuts to emissions – over 7 per cent each year for the next decade.
Convener of Mission 2020 Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change (UNFCC), said: “Reaching net zero emissions by 2050 is a global imperative made clear by science, with huge benefits for all of society. “We are all better off when finance is flowing towards a liveable future, and today’s announcement makes clear that investors are committed to that pathway. That the world’s asset owners are collaborating unequivocally to limit warming to 1.5°C should be a real boost for all governments preparing to step up their own commitments under Paris in 2020,” she added.
PRI CEO Fiona Reynolds said: “Asset Owners have a key role to play in driving much needed ambition to address the climate emergency. In joining the Alliance, the new members stand alongside founding asset owners in committing to achieve carbon neutral portfolios by 2050. We hope that the leadership shown by members of the Alliance will compel other investors to act urgently to align their portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement.”
By joining the Alliance, members hold themselves accountable on progress by setting and publicly reporting on intermediate targets in line with the Paris Agreement. The Alliance has already begun the process of establishing a work plan for 2020.
Members will ramp up engagement with the companies in which they are invested, working together with initiatives such as the UN Global Compact Business Ambition for 1.5°C, the Investor Agenda, the Science Based Targets initiative and Climate Action 100+.
Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI), the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Ms. Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
Comments from the new Alliance members:
Maurice Tulloch, Aviva CEO: “Contributing to a more sustainable world is at the heart of our purpose. We’re investing with sustainability in mind, are engaging with companies through active stewardship and have been lowering our footprint for some time now. We want to accelerate our efforts. It makes good business sense, and it matters to our customers, partners, and the communities we work in. We will continue to make positive changes and are therefore proud to join the Net-Zero Asset Owner Alliance.”
Thomas Buberl, AXA Group CEO: “Our target is to contain the ‘warming potential’ of our investments to 1.5°C by 2050. But because we operate in a business environment which is not ‘Paris-aligned’, our investment universe is far above 1.5°C today. This is why we undertake this commitment with the expectation that governments and the actors of the ‘real economy’ will also take and implement meaningful climate commitments which we are keen to support. That is also why we have decided to join the Net-Zero Asset Owner Alliance, which is precisely designed to push this agenda. As part of this Alliance, we are notably looking forward to contributing to the development of common metrics and methodologies”
Yves Chevalier, Executive Director, FRR: “FRR is proud to be part of this asset owners’ initiative, which is aligned with our Responsible Investment Strategy. Given the urgency in climate issues, this strategy ushers in a new phase that will drive ambition further by increasing accountability at all portfolio levels and involving the entire financial management ecosystem to underline the leadership role assumed by the FRR over many years. Through this initiative, FRR will work with its peers in a realistic and efficient approach.”
Antoine Lissowski, Chief Executive Officer, CNP Assurances: “We are pleased to contribute, together with the other members of the Alliance and under the aegis of the United Nations, to this remarkable initiative to limit global warming and meet the objectives of the Paris Agreement. We want to work with all French asset-owners to create a real dynamic and achieve carbon neutrality in our portfolios by 2050.”
For more information on the UN-convened Net-zero Asset Owner Alliance visit the website here.